Waitrose prices have plummeted following the extension of its Brand Price Match scheme - which matches the retailer’s prices with Tesco - in early May.

Waitrose now matches Tesco prices on all branded groceries not on promotion, having previously matched the UK’s biggest supermarket on just 1,000 selected branded goods.

Following the move, annual price inflation at Waitrose stood at just 1.8% for the four weeks t0 29 May - down dramatically from 4.2% in April.

By contrast, prices at the big four supermarkets were on average 4.3% higher last month than they were a year ago, according to The Grocer Price Index, compiled by BrandView.co.uk.

Brand Price Match was not the only factor that brought prices down at Waitrose. More generous promotions also played their part - when taking into account deals, Waitrose prices fell by 1.9% month-on-month, while base prices fell by 0.9% over the same period. The biggest price cuts were made in soft drinks, household, beauty, bakery and frozen products.

Wholesale prices: fresh produce

Tomato prices have soared after the recent hot weather led to a surge in demand for salad vegetables. At £875/tonne, they are currently 34.6% more expensive than this time last year, having risen by a further 6.1% over the past month.

Earlier in the year, growers had struggled with weeks of heavy rains and poor light levels, which led to lower production volumes. “There hasn’t been huge production and therefore prices have gone up,” says Paul Faulkner, commercial manager at grower Eric Wall. He predicts strong demand will continue as a result of the good weather and the Jubilee weekend.

Banana prices have started to come down over the past month, as concerns about flooding and heavy rains in Ecuador and Costa Rica have eased and the Dominican and Ivorian production seasons are getting into full swing. They now stand at £855/t, down 10.5% over the past month, but still up 6.9% year-on-year.

Waitrose’s latest sales figures suggest its new, more aggressive pricing policy is going down well with shoppers. According to the latest figures from Kantar Worldpanel, Waitrose sales rose by 7% year-on-year in the quarter to 13 May against total grocery market growth of 3%.

In a month when torrential rain eased drought fears and oil prices retreated from last month’s highs, only Morrisons and Sainsbury’s elected to follow Waitrose’s lead and cut prices. Sainsbury’s made the most substantial cut, of 1.2% month-on-month, although its annual inflation - at 4.3% - was still no better than the big four average.

Morrisons made a more muted 0.3% reduction in prices month on month. Because of substantial price cuts made this time last year, the net result was that its annual inflation actually rose from 3.6% in April to 4.7% last month.

The two biggest multiples - Tesco and Asda - bumped up prices by 0.9% and 1.2% respectively in May. Although the monthly rise at Asda was bigger than at Tesco, Asda is still doing a better job of keeping annual inflation under control. Asda’s prices were up 3.4% year-on-year, whereas Tesco’s were 4.6% higher. Strip out the impact of promotions and Asda’s lead on its closest rival is even wider - the supermarket kept annual base price inflation at 2.2% compared with 4% at Tesco.

On a category basis, the biggest price hikes by far were seen in frozen food - prices rose 6.4% month-on-month and now stand 11% higher than a year ago, higher even than tobacco, which was 10% up year-on-year. And the categories that fell furthest in price were baby products - down 3.6% - and household products, which slipped by 1.5%.